Prime minister laments unemployment hasn’t dropped to desired level

Prime Minister Tayyip Erdoğan (C) speaks at a meeting of the Economy Coordination Board meeting. Ministers and representatives of business organizations tried to find solutions for the ongoing crisis-ridden economy.

Prime Minister Recep Tayyip Erdoğan has said that unemployment in Turkey has not decreased enough in recent years despite some positive developments.

"With the stable growth process, household incomes and expenditures have been on the rise, poverty was down and the distribution of income was better [over the last six years]," Erdoğan explained at a meeting of the Economic Coordination Board (EKK) in Ankara yesterday.

"The global economic crisis we are going through may have a negative impact on the business sector, the labor market and the social structure of our country, as well as throughout the entire world," he noted. He also stressed that Turkey aimed to reduce the impact of the crisis as much as possible and reaffirmed his government's determination to take the necessary measures to this end.

"We attach great importance to stopping any possible crisis from affecting our laborers and low-income earners," he added.

Erdoğan said the board would discuss the possible effects the crisis may have on all segments of society and the possible measures that could be taken. "We believe that social solidarity has taken on great importance in such a time of crisis. We will keep meeting with the representatives of the civil servant unions and civil society organizations to exchange ideas and learn about their thoughts on recent developments," he explained.

The prime minister also addressed widespread expectations that unemployment and loss of income will be amongst the most significant effects of the economic crisis. "Some expect the most important and broadest impact of the global crisis to be unemployment and loss of household income," he said, adding that Turkey was prepared for such a crisis and that the atmosphere of confidence and stability created in the country over the last six years through structural reforms have enabled it to ride out the turbulence with minimal damage. Erdoğan also said Turkey had taken all measures to seize opportunities created by the crisis and that it would continue to do so.

Erdoğan explained that increased expenditures from the budget to support the poor have also played a significant role in alleviating the effects of the crisis.

On the subject of future budget priorities, he said education will continue to enjoy the lion's share of budget allocations. Thanks to the country's current health policies, almost all sections of society, regardless of their income levels, now have access to nearly the same quality of health services, but there is still much to improve, he added.

The unions and civil society organizations submitted reports to the government about their policy recommendations for limiting the crisis' damage to Turkey. Memur-Sen proposed a reduction of five percentage points in the income taxes of laborers to ensure more equitable income distribution. It also asked the government to accelerate studies to restructure the Turkish army to decrease defense costs. KESK suggested the preparation of two comprehensive programs, one on the labor market and the other on democracy. Its report said: "Any kind of bargaining has to end immediately. Laying off workers using the crisis as an excuse must be prevented, and job security has to be ensured immediately. Minimum wages must be taken out of the sphere of taxes."

Public expenditures will protect economy, Minister Ekren says

Chances are high that increasing public expenditures will get us through this rough period in the global economy, Deputy Prime Minister and State Minister for the Coordination of Economy Nazım Ekren has said.

The minister noted in a speech last week that the government had no intention of curtailing the investment budget, contrary to what the International Monetary Fund (IMF) has occasionally suggested to shelter the government from the huge waves of the financial crisis. Ekren, on the other hand, like several other Cabinet ministers, said gearing down the economy's growth and a subsequent reduction in public expenditures would only contribute to the worsening of the situation.

Ekren was speaking yesterday at the opening ceremony of the 17th year of the Ziraat Bankası School of Banking. He gave the school's first lecture of the year and took several questions from the students. In response to a question on whether public expenditures in the 2009 provisional budget would hurt the country's fiscal discipline, he said a few factors must be paid exclusive attention to ensure that public expenditures contribute positively to growth, inflation and employment. He said the targets of these expenditures have to be determined well before the expenditures are made. Besides, policy-makers must work out the possible outcomes of these expenditures, the minister added. Ekren further said the money set aside for a number of large projects such as the Southeastern Anatolia Project (GAP) and the Eastern Anatolia Project (DAP) will play a vital role in solving problems in both supply and demand.

Ekren also stated his opinions on the future of the banking business in Turkey amidst the global crisis, predicting that all cards will be reshuffled and the rules will change. Young bankers should start looking for ways to increase their chances of finding a place within the new financial architecture, he added. Ankara Today's Zaman with wires